Kinks in the wire: Asean integration

Asean integration approaches next year, but a fully linked-up financial system will be several years in the making. Sophie Lewisohn hears about new initiatives between exchanges and what still needs to happen for trading to take off.

Expert Insight - The Rise of the Asian Superbroker

As the global banks grapple with tides of regulation,
fines and a myriad of other post-crisis issues, local Asian
institutions are tooling up and stepping in to fill the gaps.
The "Asian superbroker" is emerging and catching up with the
big guys.

Global banks have had a tough time in the past five years. Asia
is proving challenging ground, and the need to be 'local' in
every market can be a stretch. This is fertile ground for local
banks and brokers. Big deals have already been done and ASEAN
banks generally are increasing their investment in services for
international clients wanting access to Asian markets - from
Singapore and Hong Kong to Mongolia and Myanmar. Indeed some
are reaching out past the Asian border too. Could these Davids
of the broking world really be starting to snap at the heels of
the Goliaths?

While Europe works through the after-effects of integrating many
unequal economic parts, the south-east Asian nations are nearing
the creation of their own economic community in 2015.

The similarity between their charters is striking. The goals of
euro architects Francois Mitterrand, Jacques Delors and Helmut
Kohl rise again in Asean's Charter, whose aim is "a stable,
prosperous and highly competitive Asean Economic Region in which
there is a free flow of goods, services and investments, a freer
flow of capital, equitable economic development and reduced
poverty and socio-economic disparity."

But the similarities end there. It is tempting to view Asean as
the next EU, but the groups of countries are markedly different,
with different goals and different challenges.

A loose economic team since 1967 when Indonesia, Malaysia, the
Philippines, Singapore and Thailand teamed up, Asean has doubled
its membership to include Brunei, Cambodia, Laos, Myanmar and
Vietnam. The list includes one of the world's richest countries
(Singapore) and one of the poorest (Myanmar), and every political
system from state-run Vietnam and Cambodia to military Myanmar
and Thailand and democratic India.

The challenges in uniting such a group are clear, but there is a
sense, on a tense political stage, of strength in numbers.
Asean's combined GDP weighs in at $2.3tr, and is forecast by the
Economist Intelligence Unit to outsize Germany's by 2018.

While a single currency is off the menu, Asean trade delegates
regularly pay homage to the benefits of closer ties through the
region. Tariffs between countries are being lowered with the goal
of free trade throughout the region, while the financial system
is planning a parallel integration.

But there are doubts about the speed with which the latter can be
achieved. "There has been talk about a common trading network for
as long as I've been working in Asia," said Steffen Gemuenden,
CEO of RTS Realtime Systems. Recently acquired by Bloomberg, the
firm has operated in the region since the 1990s. "We are still at
the very beginning."